IBM PVU Licensing
Introduction: IBM’s Processor Value Unit (PVU) licensing is one of the most widely used and complex models for on-premises IBM software. Under this model, the cost of IBM software is directly tied to the processor type and number of cores on which it runs.
On paper, it sounds straightforward, but in practice, compliance depends heavily on IBM’s License Metric Tool (ILMT) and diligent oversight. Mismanaging PVU licensing can result in significant audit penalties and increased costs.
For CIOs, IT procurement, and software asset management teams, mastering the PVU model is crucial to controlling IBM software expenditures and avoiding compliance pitfalls.
Read our ultimate guide, IBM License Models: PVU, RVU, Cloud Pak, SaaS, and Beyond.
In this guide, we explain how PVUs work, how costs are calculated, the difference between full-capacity and sub-capacity licensing, and how to manage compliance, optimize usage, and negotiate better deals with IBM.
Armed with these insights, you can avoid PVU pitfalls and turn IBM’s rules to your advantage.
What is PVU Licensing?
IBM’s PVU (Processor Value Unit) licensing assigns a point value to each processor core based on the hardware’s type and performance.
The number of PVU entitlements you need for a given IBM software deployment is calculated by multiplying the number of processor cores allocated to the software by the PVU value per core (defined in IBM’s PVU tables). In plain terms, having more cores or more powerful processors requires more PVUs.
IBM publishes official PVU tables for all supported processors and updates them when new CPUs are released. If you upgrade or change your server hardware, your PVU licensing requirement may change, even if your software usage remains the same.
For instance, an 8-core server at 70 PVUs per core would require 560 PVUs of licenses. If those eight cores are rated at 100 PVUs each on a newer system, you’d need 800 PVUs. In this way, PVU licensing aligns the software cost with the power of the hardware: bigger or faster servers cost more to license.
Full-Capacity vs. Sub-Capacity Licensing
IBM offers two methods for counting PVUs for a deployment: Full-Capacity and Sub-Capacity (Virtualization Capacity) licensing.
The difference is whether you must license all cores on the physical server or only the cores you actually allocate to the IBM software.
- Full-Capacity PVU Licensing: You require PVU licenses for all processor cores in the physical server where the IBM software is installed. It doesn’t matter if the application only uses a few cores or runs in a small VM – without sub-capacity rights, every available core counts. For example, if an IBM application is on a 16-core server, you must license all 16 cores (even if the app effectively uses only 4). Full capacity is simple but often inefficient, as you’re paying for a lot of unused CPU capacity.
- Sub-Capacity PVU Licensing: Sub-capacity licensing lets you license only the processing capacity you actually use in a virtualized environment. In the above example, if the application is limited to 4 cores on a 16-core host, sub-capacity means you only license those four cores. This can save 30–60% in licensing costs because you’re not paying for idle cores. However, sub-capacity comes with strict requirements: you must track usage with IBM’s ILMT tool and use an IBM-approved virtualization platform. If you don’t meet these conditions, IBM will require full-capacity licensing for your deployment.
Example PVU Values by Processor Type
| Processor Type | Cores | PVU per Core | Total PVUs |
|---|---|---|---|
| Intel Xeon | 4 | 70 | 280 |
| IBM Power Systems | 8 | 120 | 960 |
| IBM z Systems (IFL) | 2 | 100 | 200 |
Different hardware can require very different PVU totals for the same number of cores, as the examples above show. Always consult IBM’s latest PVU table when planning capacity or negotiating licenses.
IBM RVU Licensing Model: How Resource Value Units Work (and What They Cost You)
Compliance Challenges with PVU Licensing
PVU licensing presents significant compliance challenges, primarily centered on the IBM License Metric Tool (ILMT). If you want to use sub-capacity licensing, ILMT is mandatory.
This tool monitors your IBM software deployments and measures the number of cores in use, producing reports that IBM can audit. Failing to maintain ILMT properly is a serious compliance risk.
Under IBM’s rules, if you use sub-capacity licensing but cannot provide complete ILMT data for every applicable server, IBM will consider you non-compliant.
In an audit, missing or outdated ILMT reports mean IBM will charge you for full capacity, wiping out any sub-capacity savings.
Common pitfalls to watch out for:
- Incomplete ILMT coverage: Ensure ILMT is installed and tracking every server and VM where IBM PVU-based software runs. If a VM can move across hosts (e.g., in a VMware cluster), each host must have ILMT running. Any coverage gap can invalidate your sub-capacity eligibility.
- Outdated ILMT or catalogs: Keep ILMT (and its PVU catalog) updated to the latest version. An outdated ILMT might not recognize new software or processor types, undermining the accuracy of your usage data.
- Incorrect exclusions or manual tweaks: Avoid excluding systems or altering ILMT data unless absolutely necessary. If you omit a server, thinking it’s “just a backup” or a dev instance, IBM could treat that as unlicensed usage if that server ever ran the software.
Bottom line: sub-capacity licensing demands discipline. Treat ILMT management as an ongoing priority. If maintaining ILMT feels burdensome, remember that the alternative is paying for full-capacity licensing on everything – a far higher cost. In most cases, the savings from sub-capacity are worth the extra diligence.
Cost Drivers in PVU Licensing
Various factors can drive up PVU licensing costs. Being aware of these helps you anticipate budget impacts and plan accordingly:
- Hardware Refreshes: Upgrading to newer or larger servers can sharply increase your PVU requirements. Replacing an 8-core server (70 PVUs per core) with a 16-core server (100 PVUs per core) would more than double the PVUs needed. Always forecast the licensing impact of hardware changes before you implement them.
- Virtualization Growth: Expanding your virtual environment can unintentionally raise PVU licensing needs. Every new VM or container running IBM software adds cores that must be licensed. If you allocate more vCPUs to an IBM workload or let it spread to additional hosts, the PVU count will climb. Without tight controls (and ILMT tracking), virtualization can lead to “license sprawl.”
- Software Upgrades or Changes: Changing the version or edition of an IBM product can alter your PVU needs. A new release might introduce extra components or increased capacity that require more PVUs. Treat major software upgrades as a trigger to re-check your PVU calculations and ensure you have sufficient entitlements.
Read about IBM-user licensing, IBM User-Based Licensing: Authorized, Concurrent, and Floating Models Explained.
Optimization & Cost Reduction Tactics
Even with IBM’s strict rules, you can take steps to minimize PVU costs:
- Regular License Reviews: Periodically compare your PVU licenses owned to PVUs actually in use (for example, do a quarterly internal audit). This will flag any overuse (so you can correct it) or excess licenses (so you can reduce them). Staying on top of your license position helps prevent surprises or overspending.
- Automate ILMT Compliance: Integrate ILMT tracking into routine operations. Automatically deploy ILMT agents on every new server or VM with IBM software, and schedule regular (at least quarterly) ILMT reports. Automating this process significantly reduces the likelihood of missing a report or overlooking a system error that could result in costly audit issues.
- Consolidate and Right-Size: Utilize the fewest servers necessary for your IBM workloads, aiming for high server utilization. Replacing four lightly used servers with two fully used servers cuts the number of cores you must license. (Just be mindful that larger servers can carry higher PVU-per-core ratings – factor that in before consolidating.)
- Consider Alternative License Models: Check if a different IBM licensing metric would be more cost-effective for your situation. For instance, a small user population might be more cost-effective to license using an Authorized User model than by purchasing PVUs on a large server. Or if you’re shifting to containers and cloud, IBM’s Cloud Pak licensing (using Virtual Processor Cores) could offer better value. IBM lets you convert PVU entitlements to these models, so use whatever metric gives you the best cost advantage.
Negotiation Strategies for PVU Licensing
When negotiating or renewing IBM licenses, use these tactics to get better terms:
- Seek Steep Discounts: IBM’s list prices are high, but large customers typically receive discounts of 20–40%. Don’t accept the first offer. Aim for at least a 30% discount – especially on large deals – and make it clear that you expect a substantial reduction off the list price.
- Limit Price Increases and Enable Give-Backs: Cap your future costs by negotiating limits on annual support fee increases (for example, no more than ~3% per year). Also insist on true-down rights – the option to reduce your PVU license count (and fees) at renewal if your usage drops. This ensures you won’t pay for capacity you no longer need.
- Leverage Your Total IBM Spend: Remind IBM of the other businesses you have with them (or plan to have). If IBM sees opportunities to grow your account (through hardware, cloud services, etc.), they’ll be more motivated to offer concessions on your software licenses. And if you’re evaluating non-IBM alternatives, a polite hint can strengthen your negotiating position.
- Negotiate Future Flexibility: Include provisions that allow you to adjust as your needs change. For example, secure the right to convert PVU licenses to a different metric (like cloud-based cores or per-user licensing) if you later migrate to a new platform. Similarly, ensure you can transfer licenses to new servers or environments as you upgrade. The goal is to avoid being stuck with a rigid license model if your infrastructure evolves.
Checklist – Managing PVU Licensing
Use this checklist to help manage IBM PVU licensing and avoid common pitfalls:
☐ Confirm PVU ratings for all processor types against IBM’s official PVU table (no guesswork on core values).
☐ Deploy and update ILMT on all relevant systems; schedule quarterly reports and archive them as proof of compliance.
☐ Verify full vs. sub-capacity status for each deployment (know which servers are fully licensed and which are sub-capacity, and ensure ILMT covers any sub-capacity environments).
☐ Negotiate renewal protections – e.g., caps on support fee increases and the right to reduce licenses if usage drops.
☐ Assess hardware changes for impact – before adding new servers or CPUs, evaluate how it affects PVU requirements and budget.
☐ Secure metric flexibility in agreements (ability to switch to cloud, user-based, or other licensing models if needed without losing value).
FAQs
Q: What does PVU mean in IBM licensing?
A: PVU stands for Processor Value Unit. It’s a unit that IBM uses to measure software licenses based on the number of CPU cores. Each processor core has a PVU rating, and the total PVUs required equals the number of cores you’re licensing multiplied by their PVU value.
Q: Do I need ILMT for PVU licensing?
A: Yes – if you want sub-capacity licensing. IBM’s ILMT tool is mandatory to track PVU usage in virtualized environments. Without ILMT documenting your usage, IBM will require full-capacity licensing – meaning you must license all physical cores of the server, not just the ones you actually use.
Q: How often does IBM update PVU values?
A: IBM updates the PVU tables whenever new processors come out. Always check the official PVU table before any hardware upgrade or refresh to ensure you have the latest values. Relying on outdated PVU data can lead to compliance mistakes or budget surprises.
Q: Is PVU licensing cheaper than Authorized User licensing?
A: It depends. PVU licensing tends to be more cost-effective for heavy server workloads. Authorized User (AU) licensing (per named user) might cost less if you have only a small number of users. It’s best to compare both models for your specific situation to determine which one yields a lower total cost.
Q: What’s the biggest PVU compliance risk?
A: Not using ILMT properly. If ILMT isn’t set up and collecting data for every applicable server, IBM will assume full-capacity licensing for those systems, which can quickly multiply your costs. Neglecting ILMT can turn an optimized PVU environment into a costly compliance problem.
Read about our IBM Licensing Assessment Service.
